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Oxfam Discussion Papers

When Work Wont Pay


In-work poverty in the UK

Krisnah Poinasamy
Oxfam GB

November 2011

Oxfam Discussion Papers


Oxfam Discussion Papers are written to contribute to public debate and to invite feedback
on development and humanitarian policy issues. They are work in progress documents,
and do not necessarily constitute final publications or reflect Oxfam policy positions. The
views and recommendations expressed are those of the author and not necessarily those
of Oxfam.
For more information, or to comment on this paper, email kpoinasamy@oxfam.org.uk

www.oxfam.org.uk
Contents
Summary ........................................................................................................................... 4

The case for action ............................................................................................................ 4

The causes of in-work poverty ....................................................................................... 5

Discussion ......................................................................................................................... 5

1. Oxfam and in-work poverty ...................................................................................... 7

2. The case for action on in-work poverty .................................................................. 9

Child poverty .................................................................................................................... 9

Health inequalities ........................................................................................................... 9

Effect on families and communities ............................................................................ 10

The cost to business ....................................................................................................... 10

3. The causes of in-work poverty ............................................................................... 12

Background trends: globalisation and the response of government employment


policies ..................................................................................................................... 12

The response of government policies ....................................................................... 13

The key causes of in-work poverty .............................................................................. 14

A. Who you are ............................................................................................................ 15

B. Low pay: from one trap to the next ...................................................................... 16

C. Inadequate social protection ................................................................................. 17

D. Inadequate labour rights ....................................................................................... 20

F. Lack of labour rights enforcement ........................................................................ 21

G. Lack of responsible employment ......................................................................... 23

4. Pro-poor policy responses: discussion .................................................................. 24

1. Work should pay enough to live on ........................................................................ 24

The Living Wage .......................................................................................................... 24

Long-term uprating of the National Minimum Wage ........................................... 25

2 When Work Wont Pay, Oxfam Discussion Paper, November 2011


Restructuring of labour market rewards .................................................................. 25

2. Provision of adequate social protection .................................................................. 26

Higher earnings disregard ......................................................................................... 26

Gender-sensitive social protection ............................................................................ 26

Sustainable work must be accompanied by a rebuilding of non-financial assets


................................................................................................................................ 27

3. Ensuring adequate labour rights and that labour rights are effectively enforced
................................................................................................................................... 27

Reduce precarious employment contracts ............................................................... 28

Right to request flexible working .............................................................................. 28

Employment Tribunals ............................................................................................... 29

Protection from unfair dismissal ............................................................................... 29

Effective labour rights enforcement .......................................................................... 29

4. Ensure adequate progression reducing the gap between good jobs and bad
jobs ............................................................................................................................ 30

Work-based training ................................................................................................... 30

Training outside the workplace ................................................................................. 31

Support in seeking employment ............................................................................... 31

Notes ................................................................................................................................ 33

When Work Wont Pay, Oxfam Discussion Paper, November 2011 3


Summary
For the past 30 years, the political consensus has held that work is the best route
out of poverty. And yet more than four million of the 13.5 million people who
live in poverty in the UK are working. There is clearly a contradiction between
the consensus and the reality.

This paper is a discussion of some of the issues that Oxfams work in this area
has revealed. It is not a comprehensive overview nor does it list policy solutions.
Instead it is a contribution to the emerging debate that is challenging the
consensus, and Oxfam will seek with others to identify what solutions could help
us all achieve our ambition of decent work for everyone.

Our ambition for a world without poverty is one with decent work; work that
serves the needs of people, communities, and the economy. Decent work means
that everyone has an adequate and stable income; everyone is protected from
exploitation; and everyone has security and power over their own lives through
fair labour rights.

The case for action


Work is invaluable for individuals in terms of providing purpose, dignity, and,
crucially, an income, enabling them to support themselves and their families. But
although work has been advocated as a route out of poverty, for many it does not
provide economic independence and may actually damage their health and well-
being.

Work is also invaluable to UK society: poor-quality work means an increase in


the costs of supporting people, lost opportunities for development, and lost
revenues in terms of taxation and profit, and it damages the countrys social
networks. The social impacts are huge for example child poverty, which leads
to poorer educational and health outcomes. Over 55 per cent of children living in
poverty in the UK live in a household where at least one adult is working; to
meet the legally binding child poverty targets, policy makers must act quickly to
overcome in-work poverty. Poor-quality work also leads to poor health for
adults, so that moving people from benefits to health-damaging work merely
shifts the balance of public spending and cannot be a long-term solution to
reducing costs.

Finally, the cost to business and to the economy is significant, with more fragile
domestic demand as millions of people are simply unable to afford goods and
services. Businesses that provide decent work have reported lower staff turnover
and higher levels of loyalty, better employee morale, lower costs (e.g. sick pay),
and higher productivity, while businesses paying below the Living Wage cost
society between 5.9bn and 6.3bn a year in extra benefit payments and lost
taxation effectively a form of corporate welfare. The blatant underuse and
underdevelopment of the skills, energy, ideas, and talents of large sections of the
population are missed opportunities to harness these capabilities to foster
development and economic growth.

4 When Work Wont Pay, Oxfam Discussion Paper, November 2011


The causes of in-work poverty
In-work poverty has a number of inter-related causes:

Low wages: Millions of people cannot earn enough to escape poverty,


either because wages are too low or because they cant do, or secure,
enough work to get by;
Inadequate social protection: Many people, who cant currently support
themselves by working because of their individual circumstance, are not
adequately covered by social protection;
Lack of labour rights: Labour rights protect workers from poverty, but
many labour rights have been eroded over recent decades and others are
under threat;
Lack of labour rights enforcement: Some companies flout labour rights
and exploit workers to cut costs and achieve a competitive advantage;
Lack of progression at work: Lack of opportunities for progression mean
that many workers will be stuck in low-waged, dead-end jobs without
the opportunity to move forward to better-paid work.

Furthermore, certain groups, such as women, ethnic minorities, and migrant


workers, are more likely to work in the types of jobs where these factors are
prevalent and thus be vulnerable to in-work poverty. Their lack of social status
and organising power has meant that in-work poverty has not become the
pressing political issue that it should be.

Discussion
The cost of in-work poverty and the gains possible through decent work are so
significant that policy makers must start to consider their ambition in this area
and the routes through which these gains can be achieved. Clearly the solution is
not simply economic growth, as the structure of the economy has substantially
changed towards an hourglass jobs market, with good jobs and bad jobs but
few middle-tier jobs, and little opportunity for progression between them and it
is the sectors at the bottom of the jobs market where employment is set to grow.

As this paper is intended to stimulate discussion, it considers the following


points, but ultimately the solutions will need to be wider and more far-reaching:

Work should pay enough to live on. The National Minimum Wage
should be increased to a level which represents a Living Wage (a wage
that is considered to be enough to live on).
Social protection (the welfare and benefits system in the UK) should
provide an adequate safety-net. People who are unable to earn enough to
live on through employment should receive adequate additional support
through the welfare system to support them and their families.

When Work Wont Pay, Oxfam Discussion Paper, November 2011 5


Labour rights should protect workers, and should be enforced. Workers
should have adequate labour rights, and these should be effectively
regulated and enforced.
Employers should take responsibility for workers and should support
progression. Employees living in poverty need to be able to develop
skills, undertake training, and move from low-paid to better-paid work.
Greater social dialogue is vital for businesses and workers. Higher
levels of unionisation and union recognition help to protect workers
against the causes of working poverty, and enable effective
implementation of solutions to it.

Tackling in-work poverty requires the active involvement of all stakeholders,


including business leaders, employers, unions, consumers, and workers. It will
require creativity and ingenuity to think differently about the relationships
between employers and workers, to re-evaluate the way we value and reward
work as a society, and to develop a range of policies and practices to achieve
decent work. Decent work will boost the economy, improve the health and well-
being of individuals, families, and communities, and reduce the cost of welfare
and health services. We cannot afford not to tackle in-work poverty.

6 When Work Wont Pay, Oxfam Discussion Paper, November 2011


1. Oxfam and in-work poverty
I want to work, I have always worked. Sometimes I have had two or three jobs you
have to. Now I work 20 hours a week, but it is going up to 25. Ill lose most of that in tax,
but it is better than sitting at home. It is hard to get by and I cant save anything.
Tracey, single mother

With over 130 food banks, the Trussell Trust sees the problem at the sharp end. And we
are finding that a substantial proportion of our clients now come from working
households. It only takes your overtime being reduced, or only being able to get part-time
work, to push individuals and families over the edge. The stories we hear from our clients
provide clear evidence that theres an urgent need to address in-work poverty, as well as
out-of-work poverty. It is a real indictment that working people need to be referred to food
banks like ours for emergency help.
Chris Mould, Executive Chairman, the Trussell Trust

Oxfam believes that no one should live in poverty in the UK. It thinks that, in the
sixth richest country in the world,1 everyone should have enough to live on.
Work should enable people who have a job to earn a secure and dignified living.
And a lack of decent, secure jobs is one of the key barriers preventing
unemployed people from working.
Oxfams programme experience in the UK has repeatedly shown that most
people see having a good job as the best way to move out of poverty, whether
they are mothers from minority ethnic communities in Tyne and Wear,2 single
parents in Bristol,3 or people living on low incomes in Bradford.4 Our work with
grassroots communities, and with groups of workers from particular sectors,5 has
also shown us that people in poverty are often willing to work overtime, do
double shifts, be constantly on call, or work in two or three different places in
order to keep their jobs, and try to earn enough to get by.
Despite the willingness to work, and the flexibility, shown by so many people in
finding work, Oxfam also knows that many working adults such as John and
Natalie (see case study) simply do not earn enough to live on or support their
families. Some struggle to pay for adequate food and heating; some work long
hours in conditions which damage their health and well-being; many others can
never afford an outing or a holiday or cant cope with unexpected shocks such
as a broken boiler or cooker. Oxfam is grateful to the many people who have
shared their stories of working poverty, and their experiences are reflected in this
paper.
Oxfam has an ambition of decent work: where everyone who can work is able
to generate an adequate and stable income; where they are protected from
exploitation and given security by adequate labour rights; and where, over time,
they are able to progress to better-paid work. This vision is obviously pro-poor,
but in an economy that will be increasingly dependent on developing human
capital, it is also fundamentally pro-business. This paper aims to stimulate

When Work Wont Pay, Oxfam Discussion Paper, November 2011 7


discussion within Oxfam and amongst key stakeholders on how best to tackle the
crisis of in-work poverty and achieve decent work.

John and Natalie: working poverty


John and Natalie live in rented accommodation in Ebbw Vale, South Wales, with their two
young children. John used to have a full-time job but was made redundant. Keen to work, he
took a part-time job in the retail sector, but his job is in the next valley and public transport is
very poor, so he needs to use his car to get to work. His employer wants him to work four
days of four hours each, rather than working longer shifts so he spends a significant
proportion of what he earns just on petrol.
The couple struggle to get by and in really difficult times have missed meals themselves so
they can feed their children. At times, John and Natalie have been referred to a food bank
run by Oxfam partner the Trussell Trust to get emergency help to tide them over a crisis. But
neither Oxfam nor the Trussell Trust believes that food banks are a solution to in-work (or
out-of-work) poverty; food banks may offer some help to tackle immediate need, but the
solution must lie in ensuring that work always pays enough to live on.

8 When Work Wont Pay, Oxfam Discussion Paper, November 2011


2. The case for action on in-work poverty
While work should provide a route out of poverty,6 the reality is that for many
people in bad jobs, work does not provide economic independence and may
actually damage their health and well-being. Yet the cost of in-work poverty is
not just something that is borne by the individual concerned; it has a huge impact
on communities, businesses, and the State, both in increased costs and lost
opportunities for millions of people, massive expense to taxpayers though the
cost of benefits, and significant lost revenues in terms of tax and profits.

Child poverty
Under the Child Poverty Act 2010, the government is legally committed to
ending child poverty by 2020. Yet 55 per cent of all children living in poverty in
the UK (1.5 million children) live in a family where at least one adult is in some
form of paid employment.7 It is a sobering truth that child poverty is more
common in working than in non-working households.8
Child poverty has clear human and financial costs. A wealth of evidence shows a
clear, causal link between income poverty and poorer outcomes for children
throughout their lives, in terms of educational attainment at foundation, primary,
and secondary school, on many health indicators, and in their future
employment prospects.9 Poor children are very likely to become poor adults,
who may themselves be trapped in low-paid work, and whose own children will
live in poverty. It is unlikely that the governments legally binding child poverty
targets will be met without significant efforts to reduce working poverty as well
as out-of-work poverty.

Health inequalities
The highly regarded Marmot Review10 on health inequalities clearly identifies
working conditions and employment as one of five key areas which contribute
to poor health outcomes for those on lower incomes and which have
quantifiable, and significant, human and economic costs. As Marmot outlines:
People currently dying prematurely because of health inequalities would
have enjoyed between 1.3 and 1.5 million extra years of productive life
as workers, consumers, carers, and family and community members.
More than three-quarters of the population do not have a disability-free
life expectancy as far as 68 the proposed pensionable age in the UK
making it unlikely that they will be able to work and ensuring that they
will require care from family and the National Health Service.
Health inequality in illness accounts for productivity losses of 3133bn
per year in lost taxes and higher welfare payments, and an additional cost
of 5.5bn a year to the NHS.

When Work Wont Pay, Oxfam Discussion Paper, November 2011 9


Significantly, Marmot does not just associate poor health, illness, and disability
with individual lifestyles or even unemployment. The report concludes that:
insecure and poor-quality employment is also associated with increased risks of
poor physical and mental health. Getting people off benefits and into low-paid,
insecure, and health-damaging work is not a desirable option.

Effect on families and communities


Oxfams work with low-income communities has clearly shown the impact of
poverty, both in-work and out-of-work, on families and communities. Using a
sustainable livelihoods approach,11 Oxfam has worked over many years to assess
the assets that people have to help them cope with poverty and try to move
forward, and the barriers they face in doing so.
This approach has clearly revealed the importance of social networks for people
on low incomes in helping them to get by day to day. Reciprocal child care, help
with other unpaid care of relatives or tasks such as shopping, as well as loans of
money or equipment or exchange of skills, are vital in helping those on low
incomes to cope (whether working or not). It is also clear that managing on a low
income is hard work and takes time: for example, needing to shop in a number of
places to get basic goods at the lowest prices.
For people in in-work poverty, working may actually undermine their ability to
cope on a low income. There is less time to spend buying the cheapest foods;
there may be transport costs involved in getting to work; and without the money
to pay for professional child care, a worker may be more reliant on their social
support network but less able to reciprocate. People in working poverty may find
themselves sacrificing time spent with their children, or on community activities,
and have less time to manage being poor without the return of a decent
income and reasonable employment conditions. These people are both time-poor
and income-poor.

The cost to business


The consequences of allowing working poverty to increase unabated pose
significant long-term risks to the economy and to growth. Supporting the current
level of in-work poverty is not sustainable for either business or the State.
Without decent pay and conditions businesses will see a drop in demand, as
consumers in working poverty see their incomes further squeezed (by
inflationary price rises and below-inflation wage increases) and are less able to
buy the goods and services that will stimulate the economy. Because people on
low incomes spend, rather than save, a higher proportion of their income, raising
pay for this group would be a very effective boost to the economy.
And if working poverty continues to increase, many working people will remain
dependent on in-work benefits for the long term, and the government will not
succeed in its ambition to reduce the welfare bill, or the deficit. Companies
paying below a living wage cost the taxpayer between 5.9bn and 6.3bn a year

10 When Work Wont Pay, Oxfam Discussion Paper, November 2011


in benefit payments and loss of tax12 effectively a form of corporate welfare
from government direct to business.
Conversely, the impact of not being a decent employer leads to higher costs and
reduces the quality of the workforce. Professional services firm KPMG has found
that a decent work model (paying the Living Wage and improving other benefits,
such as holidays, sick pay, and insurance) at its UK facilities led to the following
outcomes: turnover amongst cleaning staff more than halved; morale improved;
despite improved sick pay, potential abuse did not materialise; productivity
improved; attitudes become more flexible and positive; service improved and the
help desk received fewer complaints; and suppliers experienced reduced training
and other overhead costs as employee loyalty increased.13

When Work Wont Pay, Oxfam Discussion Paper, November 2011 11


3. The causes of in-work poverty
Im struggling because Ive had to give up work the hours they gave me wasnt
enough so its got me into debt they said Id have 15 hours a week and they knocked it
down to six, which was no good at all.
White woman, interviewed for Recession, Poverty and Sustainable
Livelihoods in Bradford14

I work for an agency but Im self-employed. They pay me 2.29 per room. I cant clean
enough rooms to make the minimum wage. There is no sick pay or holiday pay. And I
have to buy my own cleaning materials and uniform from my wages.
Monica, cleaning hotels in London

There are many causes of in-work poverty and numerous factors which impact
on the phenomenon many of which interact with each other. This section looks
at the background context of the globalisation of the late 20th century and the
government employment policies that have responded to it over recent decades,
and then examine specific causes of working poverty today, including the
following factors: who you are; low pay; inadequate and inflexible social
protection; lack of labour rights; inadequate labour rights enforcement; and lack
of responsible employment.

Background trends: globalisation and the response of


government employment policies
While economic globalisation (the integration of global production and
distribution chains and the rapid growth in transnational companies) is often
considered to have promoted growth and development around the world, it has
also had significant (arguably negative) implications for UK workers.
Globalisation has enabled transnational corporations to move production to
emerging economies where labour costs are lower,15 putting pressure on UK
suppliers to reduce their own costs to remain competitive.16 This has resulted in a
decline in manufacturing industry as production has moved to other parts of the
world; this has both stripped out many thousands of reasonably well-paid jobs
from the economy and has encouraged a move to severely cut production costs
in those parts of the supply chain remaining in the UK, especially at the lower-
skilled ends of the spectrum.
This pressure, as well as growing privatisation of previously public services since
the 1980s, has led to an increase in the UK of contracting out. Contracting out
means that workers, instead of being directly employed by a business or
organisation, are contracted by employment agencies on behalf of that employer
to work only on particular tasks, and for a limited time, as needed. Workers
employed by agencies are often required to work extremely flexibly on the

12 When Work Wont Pay, Oxfam Discussion Paper, November 2011


employers terms, working very part-time hours or on zero hours contracts
(where the worker does not have any guaranteed hours of work).
The move towards contracting out has led to an almost four-fold expansion of
the agency sector in the past two decades, and the number of workers employed
by agencies doubled between 1996 and 2006 with nearly 1.265 million workers
employed by agencies by 2006, or 4.5 per cent of the workforce.17 This proportion
is second only to the USA, and almost three times the level of Germany. The use
of agency labour is now common in both the public and private sectors. One
study conducted in 2004 found that over 90 per cent of organisations surveyed
had outsourced at least one element of activity to another organisation.18 While in
many cases this allows companies to bring in expertise or respond to fluctuating
market demands, the reality is that, at the bottom end of the labour market,
savings are being made at the expense of livelihoods. In the public sector there
are already 1.2 million people employed through contractors19 and, with
estimates that outsourced public services cost 20 per cent less,20 there is concern
that squeezed national, and particularly, local government budgets will lead to
greater outsourcing of public services and will exacerbate the race to the bottom
for workers pay and terms and conditions.
The result of the economic trends of recent decades has been to create an
hourglass jobs market, which sees an increase in the number of well-
remunerated good jobs at the top of the jobs market, as the UK continues to
perform strongly in sectors such as finance, academia, science, culture, and
technology. At the bottom, however, the decline of manufacturing and the rise of
service industries such as hospitality, retail, and customer services (call centres),
where low pay and employment by agencies are common, has led to a decline in
decent mid-level jobs and in increase in bad jobs with poor conditions and
little opportunity to progress up the career ladder.21 Where previously it was
possible to work ones way up from the shop floor to management, now senior
positions require advanced qualifications and social capital and it is increasingly
hard to progress up the career ladder.

The response of government policies


Government policies that attempted to respond to the context of globalisation
focused on the deregulation of business, with an emphasis on labour market
flexibility that arguably promoted growth and was good for job creation (though
not necessarily for the creation of good jobs) during the boom years of the
1990s and 2000s. Under the last Labour government, the provision of tax credits
and child benefits enabled some people to take up bad jobs that were low-paid
and possibly insecure, and maintain an adequate income. But not only did the
number of working households in poverty rise, in 2005 the number of working-
age adults with jobs living in poverty (3.6 million) overtook the number living in
workless households (3.3 million). This trend has continued, and the latest
statistics show that 4.1 million working adults live in households in poverty,
while 3.8 million live in workless households.22
The current government has aimed to cut the UKs budget deficit by 2015, and a
key strategy to achieve this has been to swiftly reduce public spending (and thus
cut public sector jobs), instead emphasising private sector growth and the role of

When Work Wont Pay, Oxfam Discussion Paper, November 2011 13


business in job creation. However, fewer jobs have been created by the private
sector than expected; and those that have are often poorly paid and part-time.23
Of the 220,500 additional jobs created between the first and third quarters of
2010, 95 per cent were in part-time employment, while one in three were
temporary jobs.24 Furthermore, men have accounted for 83 per cent of new jobs
added to the economy25 at a time when women are losing their jobs in the public
sector and female unemployment is at a 23-year high.26
The current governments employment policies have focused on getting people
into work (similar in principle to those of their predecessors) through the Work
Programme, and trying to ensure that work pays through changes to the
welfare system, though not to actual pay levels. Oxfam supports the move to
ensure that work always pays through changes to welfare reform, although it
fears that the reforms, currently being scrutinised in Parliament, do not go far
enough. However, Oxfam questions the assumption that worklessness is due
only to lack of skills or motivation, rather than the lack of jobs in a fragile labour
market, and argues that it is clear that a work first public policy that prioritises
taking any job that is going is leading to people simply swapping out-of-work
poverty for working poverty.

The Work Programme


The Work Programme is the UK governments active labour market policy, which replaced
the Flexible New Deal in summer 2011 and seeks to get the long-term unemployed back into
work. The Work Programme focuses on sustainable employment by rewarding providers
who ensure that people remain employed (as opposed to rewarding them simply for getting a
job).
While this policy aims to ensure that fewer people end up in the cycle between
unemployment and low-paid work (known as churn), sustainability must also be assessed
against the types of job that people are expected to take. There is a risk of people being
pushed into low-paid work with no prospects, and this risk is higher for certain groups,
including women. The threat to withdraw social protection (i.e. benefits) for failure to take
work, or to take on more hours, while taking no account of individual circumstances, will also
have a negative impact.
Oxfam emphasises the need to provide in-work support to ensure sustainability and
progression out of working poverty and also emphasises that the Work Programme must
account for the different experiences of men and women in returning to the labour market,
and the child-care duties often undertaken by women.

The key causes of in-work poverty

Barbara: no help for single working adults


Barbara does a number of part-time jobs, including teaching, cleaning, and driving. She
earns around 500 a month. She shops at charity shops and has become a vegetarian
because she cant afford meat. She tries to grow her own vegetables and relies on her family
for extras. Barbara says: Im young I would love to be able to go out for a drink or to the
cinema, but I cant afford it. Its funny I would get help if I had children, but it seems that
single working adults dont get any help.

14 When Work Wont Pay, Oxfam Discussion Paper, November 2011


Kevin: worse off working
Kevin was on incapacity benefit for 20 years, after an accident at work. Now he works 25
hours a week as a caretaker. Im worse off now than I was on incapacity benefit, he says.
Before I got full housing benefit and help with council tax. Now I struggle to get by. I make
sure I pay my rent and council tax as I dont want to lose my home. I go to local shops and
buy the cheapest food. I want a good quality of life like everyone else but I feel like I am
living hand-to-mouth. I cant afford holidays and my sofas were given to me by my son.
Everything I have is hand-me-down. I cant afford new.

A. Who you are


Every job [interview] Ive been to from the Job Centre for three positions therell be
about 200 people applying some jobs youre over-qualified for, some jobs you know
somebody else has taken the easiest job to get now is at a restaurant.
Bangladeshi man, interviewed for Recession, Poverty and Sustainable
Livelihoods in Bradford27

A significant factor affecting working poverty is who you are: your gender,
nationality, ethnic identity, relationship status, even your age. Jobs seen as
female jobs, such as care work and cleaning, are commonly devalued and
underpaid and almost two-thirds (65 per cent) of low-paid workers are women
(2.6 million women are low-paid).28 Furthermore, womens paid work is often
taken on in addition to their unpaid caring responsibilities, which can limit the
type of work they can do and the number of hours they can work.29
Relationship status significantly affects your likelihood of experiencing working
poverty. Overall, single parents with dependent children face the highest risk: 19
per cent of single parents working full-time and 25 per cent of those working
part-time live in poverty.30 As 92 per cent of single parents are women, this again
increases the chances of women experiencing working poverty.
Oxfams research and programme experience shows that migrant workers are
also highly vulnerable to in-work poverty.31 Migrant workers face exploitation
due to factors such as language barriers, uncertainty about immigration status,
and the prevalence of employment via gangmasters and agencies in the sectors in
which they work. Such exploitation can include pressure to work excessive
hours, pay below the minimum wage, non-payment of sick and holiday pay, and
spurious deductions for work-related clothing or equipment.
People from some ethnic minority backgrounds are again more likely to
experience in-work poverty for a range of reasons, from discrimination by
employers to a lack of skills and training. Some fields of work most easily
accessible to black and minority ethnic (BME) workers for example, self-
employed taxi-driver, employment in restaurants and the hospitality industry,
etc. may demand very long hours, but at a very poor rate of return. Almost half
of all Bangladeshi and Pakistani employees earn less than 7 an hour, a higher
proportion than in any other ethnic group.32

When Work Wont Pay, Oxfam Discussion Paper, November 2011 15


Elaine: fitting employment around caring responsibilities
Elaine is a single mother who works as a home care assistant for an agency contracted to a
large social services department. When she returned to work after having a baby, she asked
if she could work five hours a day so that she could care for her son, but was told that her
only option was to work a long split shift at the weekend. She now works from 7.30am until
2.30pm and 4.30pm to 10pm each Saturday and Sunday. Elaines mum looks after her son
while she is at work, even though her mother is 68 and works as a supermarket cleaner from
3.30am until 7am. Elaine says: I feel really guilty, but if she doesnt look after him, I cant
work. There is no other child care. Even if there was, I think, how could I pay it?
Elaine is on a zero hours contract and has no guaranteed hours of work each week. She is
also under pressure to accept extra shifts in the week at short notice, with the threat that if
she does not take them she wont get work at the weekend. Elaines hourly pay of 8.45
seems quite generous for the care industry, but she is only paid for the minutes she is inside
a service users house, so 15 hours work often results in only 10 hours pay.

B. Low pay: from one trap to the next

Debbie: the struggle to pay for basic necessities


Debbie is a learning assistant in a school, and earns just 10,000 a year for a 30-hour week.
She says: Ive had to change the way I shop. I go to three shops instead of one to get the
best price. It is not ideal to spend so much time shopping around as I am a working mum.
And fuel bills are becoming more of a battle. We switch things off and put on an extra jumper
or pair of socks.

Bill: job insecurity and no chance to save


Bill works for a community project and earns around 250 a week. His wife, who worked for
a property development company, has recently been made redundant. Bob says: I worry
about money a lot. Sometimes I think things are going to be OK, that well just get another
job, cleaning or something, if we need to but my job is not secure in the current climate.
Weve not been on any holidays and you cant save on a low income. Im a musician and
there is tonnes of stuff I would love to have, but saving up isnt an option we just get by.

The UK labour market has one of the highest rates of low pay in Europe, with 3.5
million people aged 22 to retirement paid below the low-pay threshold of 7 per
hour33 and almost three quarters (72 per cent) of the working poor in low-paid
employment.34 Low pay does not necessarily lead to in-work poverty, if there are
other, higher-paid workers in the household, for instance, or if the worker has
other assets (e.g. savings) to draw on. However, where this is not the case, low
pay is a significant cause of in-work poverty.
The sectors in which low-paid work is most prevalent will come as no surprise:
hospitality (69 per cent of all workers are low-paid), agriculture (42 per cent),
retail (44 per cent),35 and social care (19 per cent). Low-paid work is also
particularly prevalent amongst certain groups, e.g. single parents, BME workers.
Sadly, it is not the case that workers use low-paid jobs as stepping stones to
higher-paid work that helps them move out of poverty. Evidence from the British
Household Panel suggests that a large proportion of low-wage earners are not
moving up from the bottom of the pay distribution scale, even over relatively

16 When Work Wont Pay, Oxfam Discussion Paper, November 2011


long periods of time 36. Women, people with no qualifications, BME workers, and
people working part-time are most likely to become stuck in low-paid work.37
The creation of the National Minimum Wage (NMW) is widely credited with
tackling low pay and improving the wages of one million people.38 However,
annual increases to the NMW have not reflected the significant rise in inflation in
recent years, as the NMW fell in real terms in 2008 and 2010 (and rose only at the
same level as inflation in 2009). In any case, people on low incomes experience a
higher inflation rate than other groups, as they spend more of their money on
transport, food, fuel, and other essentials, which have risen in price more than
other goods.39 The Institute for Fiscal Studies has calculated that the poorest fifth
of households faced average annual inflation of 4.3 per cent between 2008 and
2010, while the richest fifth experienced a rate of just 2.7 per cent.40 Higher real
inflation and static incomes add up to declining living standards for people on
low wages and hard choices about what they spend their money on, such as
choosing between heating and eating.

In financial terms...
The National Minimum Wage is currently 6.08 an hour for workers aged 21 and over (while
the top 1 per cent of earners earn 43 an hour, and the top 10 per cent earn 21.30 an
hour).41 This is significantly short of 7.20 per hour, the recommended Living Wage outside
of London; let alone the London Living Wage of 8.30. The Living Wage is calculated as a
level of income needed to allow a minimum acceptable standard of living in the UK today.42
The Living Wage assumes that people claim all the benefits and tax credits to which they are
entitled.43

C. Inadequate social protection

Trisha: hard to find suitable work


Trisha is a single mother with experience of working in child care and in the voluntary sector.
She would love to do paid work to boost her income and her self-esteem, but struggles to
find work that fits around her child care responsibilities and is not temporary. When she has
taken short-term work, her benefits have been disrupted and she has struggled to get back
to the right payments.

I wish I could work, but it isnt worth me working at all. I used to work. I was a cleaner.
But I cant earn enough to make it pay [for losing benefits]. And I would need to pay for
child care. It just does not add up.
Jenny, single mother

For those people unable to earn enough to get by because of illness or caring
responsibilities, or because better-paid or full-time work is not available, a safety-
net of social protection is vital to help them deal with fluctuations in income
week-to-week and to ensure that workers always have enough to live on.
Many countries, such as Denmark and Sweden, complement high levels of
labour market flexibility with policies that create security for workers in this way.

When Work Wont Pay, Oxfam Discussion Paper, November 2011 17


In contrast, some areas of social protection in the UK are being eroded, and while
there are some positive developments in welfare reform policy, overall social
protection in the UK does not respond to changes in individual circumstances or
in the job market in a way that workers in a 21st century labour market need. The
European Commission has described this kind of positive reaction to
employment and social security as flexicurity, which gives workers both the
flexibility to transition between jobs and security to maintain or progress in
employment.44

The components of flexicurity


The EC and EU member states, drawing on experience and analytical evidence, reached a
consensus that flexicurity policies can be designed and implemented across four policy
components to provide the flexible security that workers need in the 21st century labour
market:
Flexible and reliable contractual arrangements from the perspective of the employer
and the employee, through modern labour laws, collective agreements, and work
organisation;
Comprehensive lifelong learning (LLL) strategies to ensure the continual adaptability
and employability of workers, particularly the most vulnerable;
Effective active labour market policies (ALMPs) that help people cope with rapid
change, reduce spells of unemployment, and ease transitions to new jobs;
Modern social security systems that provide adequate income support, encourage
employment, and facilitate labour market mobility. This includes broad coverage of
social protection provisions (unemployment benefits, pensions, and health care) that
help people combine work with private and family responsibilities such as child care.45

Reductions in protection: Reductions in housing benefit, restriction of the Sure


Start maternity grant to the first child only, a three-year freeze on the rate of child
benefit, a 10 per cent cut in the amount of child-care costs for low-income
families provided by the child-care element of Working Tax Credit, and the
switch to increasing benefits annually by the lower Consumer Price Index (CPI)
measure of inflation46 are among the benefit reductions which will erode current
levels of social protection. Benefit levels have also been consistently eroded over
time: in 1980, unemployment benefit was worth a fifth of average earnings;
today, it is worth a tenth. This steady erosion of protection for the most
vulnerable has occurred despite the fact that Britains benefits bill has
significantly increased.
Universal Credit: At the centre of the UK governments Universal Credit, a key
element of its reforms to welfare, is the aim of ensuring that work pays, and is
seen to pay, for people living on benefits. Central to this goal are attempts to
simplify the system, and to make sure that people do not lose out by working,
particularly by allowing them to keep more of their benefits.47
However, the proposed reforms remain in need of improvement. Oxfam is
closely engaged in trying to improve the Welfare Reform Bill which is currently
going through Parliamentary scrutiny, and has a range of recommendations that
touch on issues including the benefit cap, the Social Fund, elements of the
conditionality regime, and important issues around the way the Universal Credit

18 When Work Wont Pay, Oxfam Discussion Paper, November 2011


will be paid. However, aside from these wider concerns, and although work
incentives will improve for many, the changes are not enough to ensure that
work pays across the board.
Earnings disregard: The disincentive to work is still too high. The earnings
disregard (the amount you can earn before losing benefits) is currently set too
low; and the rate at which benefits start to be withdrawn above the disregard, too
high, which, combined with the National Insurance and tax low earners must
pay, means that many people will lose 76p out of every pound they earn.
Second earner disregard: The Universal Credit taper will negatively affect work
incentives for second earners. If there is only one household earnings disregard,
second earners will face marginal deduction rates of 65 per cent or 76 per cent on
all their earnings, unless the first earner earns less than the household earnings
disregard.
Child care: Access to decent, affordable child care is absolutely central to
enabling people to choose to work if they are able to, particularly women. Oxfam
has called for some time for the decision, taken by the current government, to
eliminate the hours rule (which limited child-care support to those working
over 16 hours); this will help people on low incomes, particularly women, to
work fewer hours. Oxfam has also applauded the governments recent decision
to inject an extra 300m into the new child-care regime, which will mean that
most parents receive no less child-care support under Universal Credit than they
do under tax credits today. However, the poorest families, who currently receive
95.5 per cent of their child-care costs through Housing Benefit, still face a
significant reduction in support.
It is worth emphasising the importance of enabling second earner participation in
the labour market. Not only will this be pivotal to efforts to reduce child poverty
and gender inequalities48 (and many second earners subsequently become first or
sole earners, so benefit from continued contact with the labour market), but rates
of female participation in the labour market are thought by analysts like the
Resolution Foundation to have been instrumental in forging what connection
there has been over the past 30 years between headline growth rates and general
living standards. The value of policy interventions such as those above to the
population as a whole is so large that it is difficult to quantify.
Conditionality: Oxfam in general views conditionality requirements, conceived
as requirements to work, or engage in activity deemed to be useful to finding
work, as problematic and often counterproductive. These rules often do not take
account of the reality of peoples lives, let alone whether there are jobs available,
and thus threaten to erode social protection. A single parent with a young child
will struggle to find part-time work that will fit around school hours, and the
requirement to prepare for, and be available for, work will erode time available
to acquire further skills that will lead to better-paid work or even to spend
more time shopping economically in order to survive on a low income.

When Work Wont Pay, Oxfam Discussion Paper, November 2011 19


Jasmine: the difficulty of child care
Jasmine is a single mother with three children, aged ten, seven, and 17 months. She has
worked for five years as a night care assistant, working 12-hour shifts, looking after severely
disabled children. When Jasmine wanted to return to work after maternity leave, her request
to reduce her hours to two nights a week was refused. Jasmine was told that if she wanted
to come back to work she would have to sign a new contract of employment, working seven
nights each fortnight. Jasmine works nights because her nieces are able to stay overnight at
her house to look after her children. She says: Child care with a day nursery costs too much
for me to work during the day. When Jasmine needed to take emergency leave to care for a
member of her family, her request was refused. When I phoned work they said: Since you
came back [from maternity leave] you have been causing a lot of trouble. They refused to let
me even take the time as holiday.

D. Inadequate labour rights


Im cleaning rooms in a small hotel. The hotel pays me 25 for eight hours work. They
pay me cash-in-hand no wage slip. I know they should pay me the minimum wage, but
what can I do? After working nine days in a row at the hotel, I hurt my knee at work and
was in a lot of pain. The hotel said I could only have a day off if I found a friend to work
instead of me. I had to pay the friend, so I did not make any money that day.
Julia, cleaning hotels in London

Successive governments have reduced regulation of employers since the 1970s,


making it easier for them to hire and fire workers, in order to meet what they
perceive as their business needs, despite conflicting evidence on this idea.
Employment Protection Legislation (EPL) has been steadily reduced since 1992
and the UK now has the third lowest level of EPL in the OECD.49
In addition, the current Employment Status Regime (ESR) leaves some classes of
worker with very few rights. Employees enjoy full employment rights, but
Workers, usually employed by agencies, do not have the right to claim unfair
dismissal, redundancy pay, or sick pay, or request time to train. Of particular
significance to working parents is the lack of the right to request flexible
working, maternity pay or leave, or time off for emergencies. The third category
in the employment status regime, Self-employed, refers to workers who
produce goods and services for a range of customers and take responsibility for
both their own working practices and for setting the price for the work that they
do. If the worker is genuinely independent and working for a number of
customers they should be able to set a fair price for their work, but the category is
open to abuse (false self-employment) and can be used by companies to evade
their responsibilities as employers.

Magda: forced to work long hours


Magda has worked as a care assistant in the UK since 2005, working for several private
residential care homes run by a well-known company. I had to do a minimum of 60 hours a
week for almost two years. I was doing the night shift five to six days a week from 8.00pm to
8.00am, she says. She reports buzzers going off constantly, indicating the elderly residents
need of constant attention, and the carers having to be on their feet all day with very limited
breaks. Magda was too afraid to discuss her excessive workload for fear she would lose her
job.

20 When Work Wont Pay, Oxfam Discussion Paper, November 2011


The sectors in which low-paid work is most prevalent hospitality, retail, and
social care are also characterised by their use of flexible labour contracts. Such
flexibility includes very short-term contracts, work paid at piece rates, and zero
hours contracts where the worker has no guarantee that they will receive any
hours of paid work in a particular week, often under the guise of supposed self-
employment. The UK has the second highest prevalence in Europe of very short
hours contracts of less than ten hours per week (8 per cent),50 and the highest
number of zero hours contracts (5 per cent).51 While it is clear that part-time work
is often a choice to fit around other commitments, the number of frustrated part-
timers, who really need and want to work full-time, has reached 1.26 million
the highest figure since records began in 1992.52
The trend towards flexibility and false self-employment also blurs the boundaries
between the formal and the informal economy. As profit margins are squeezed
more tightly, businesses such as the hotel where Julia worked (see quote above)
often employ workers on a cash-in-hand basis, paying below minimum wage
rates and with no guarantee of regular work or of employment rights. The
vulnerability of workers in the informal economy is compounded for those who
are also claiming out-of-work benefits, since they risk criminal prosecution if the
authorities become aware of their activities. Recent small-scale research by
Oxfam on the informal economy has revealed that workers often engage in it not
because they want to work illegally, but because they cannot find a permanent,
secure job that will pay enough to live on.53

False self-employment
The status of self-employed affords no labour rights not even the National Minimum
Wage. Instead, self-employed people should normally negotiate their terms and
conditions with those for whom they provide services or labour. For many people, self-
employment is a genuine choice, which offers them flexibility about how, and how much,
they work. Some employers in low-paid sectors, where vulnerable workers have little
power, use false self-employment to avoid giving workers certain rights that they would
have as employees or workers, to avoid paying the NMW, and to make charges for
work-related expenses. Homeworkers, for example, are frequently classified as self-
employed, even though they usually receive all their work from a single factory, which
supplies the raw materials and equipment and sets a piece rate and tight timescales for
all the work that they do.

F. Lack of labour rights enforcement


There were some irregularities with our monthly wages; the payments were never clear.
Then one day they called me to the office and just fired me. The advice agency said I had a
case against the company, but it is too costly to pursue it.
Jozef from Poland, works in construction

Citizens Advice reports that it deals with more cases involving denial of paid
holiday than it does cases of all other rights.54 These workers are nearly always
low-paid, with the majority being women, often working part-time. Evidently,

When Work Wont Pay, Oxfam Discussion Paper, November 2011 21


rights that exist on paper do not necessarily lead to employers fulfilling their
responsibilities.
Labour rights are only meaningful if they are enforceable. However, in reality,
many labour rights exist on paper only, and are not effectively enforced. The UK
labour rights enforcement regime is fragmented and under-resourced, with five
different departments taking responsibility for enforcing differing employment
rights, alongside the Employment Tribunals and the Advisory, Conciliation and
Arbitration Service (Acas).

UK labour rights enforcement regime


Employment Agency Standards Inspectorate (EAS): regulates and inspects agencies;
HM Revenue and Customs (HRMC): ensures compliance with the National Minimum
Wage;
Health and Safety Executive (HSE): ensures compliance with health and safety at work
legislation, including the right not to work more than 48 hours per week;
Gangmasters Licensing Authority (GLA): licenses gangmasters in agricultural, food
processing, and associated industries;
Department for Environment, Food and Rural Affairs (Defra) Agricultural Wages Team:
enforces agricultural wages.

The UK labour rights enforcement system relies primarily on employers fulfilling


their responsibilities, workers knowing their rights, and, crucially, workers being
able to raise concerns and report bad and illegal practices. But vulnerable
workers are, by their very nature, unlikely to blow the whistle on their
employers. Aspects of their vulnerability lack of language skills, anxiety over
immigration status, lack of access to support provided by, for example, trades
unions, etc. make it highly unlikely that the most exploited workers will report
abuse, for fear of losing their jobs. The limited resources available to the
enforcement agencies mean that employers can break the law with relative
impunity, knowing they are unlikely to get caught and, even if they are caught,
will rarely face more than minimal punishment.55
Each enforcement body has a different legal framework, and is responsible either
for a particular type of employer or area of employment protection; in addition,
each has its systems and processes and its own enforcement officers or
inspectors, thus making it even more difficult for workers to understand to
whom they should go if, as is often the case, they face multiple problems at work.
In addition, some employment rights (for example, holiday pay) are not covered
by any of the five enforcement bodies; instead an employee is expected to take
their case to an Employment Tribunal to claim their rights. This is a time-
consuming and daunting process, particularly as few employees can afford legal
representation, and even if the tribunal finds in favour of the employee there is
no official system of enforcement: if an employer still refuses to pay, the
employee then has to take their case to the small claims court.

22 When Work Wont Pay, Oxfam Discussion Paper, November 2011


G. Lack of responsible employment

Stella: no guaranteed hours of work


Stella is a single parent and a care worker. She lost her permanent job as a housing support
worker when the organisation lost its funding. Stella says: My life has not been stable since
then because I cannot find a permanent job. I work whenever it is available. I have to push
hard to make sure I have a sensible amount of hours for the week I have no guaranteed
work, it is all ad hoc. The organisation I work for does not commit itself to give me work.

In the last century, many workers and employers adhered to the idea of a job for
life in which the employer had a responsibility to the employee, and the
employee was rewarded for loyalty and hard work in a particular company.
However, this idea has been eroded for some by the increase of flexibility:
workers and employers are no longer bound to each other in the same way and
the well-being of members of the labour force is often seen as someone elses
problem whether that of government or the individual rather than that of the
employer.
The lack of willingness amongst some employers to take responsibility to protect
their less-skilled workers and to help them progress contributes to in-work
poverty. Although short hours and short-term contracts suit many employers
(and some employees), others can use them to walk away from their
responsibilities, often subcontracting work to an agency; and this is particularly
the case with low-paid work such as cleaning and hospitality. Such agencies are
much less likely to invest in workers, making it harder for the working poor to go
on to get better-paid work in the future.
Some low-paid workers are also more likely to have low skills and social capital
(confidence, contacts, support networks, etc.)56 and to work for small firms with
limited opportunities for progression. The UK outspends almost every EU
country in helping unemployed people look for work, but spends very little on
training or employment support.57 This not only lets down employees but also
small-scale employers who want to grow their businesses and support their staff.
Lack of training and on-the-job progression opportunities mean that working
poverty can become a way of life. This is particularly true given the changing
nature of the labour market and the near disappearance of middle-tier jobs.

Sharon: lack of progression at work


Sharon is single and works full-time for a well-known hotel chain. She earns less than 7 an
hour, even though she has worked for the hotel for 20 years. Sharon has to work whenever
her employer needs her, often working very late nights, early mornings, and split shifts at
short notice. She never knows in advance when her time off or holidays will be. She needs a
car to get to work, but struggles to pay for the petrol, tax, and insurance. When this car
packs up, she has no savings to buy another and does not know what she will do. Sharon
manages on her wages at the moment as she works so many hours, but she cant afford a
holiday and relies on family for occasional treats. Sharon worries about the future and feels
that she does not have much to show for 30 years of reliable full-time work.

When Work Wont Pay, Oxfam Discussion Paper, November 2011 23


4. Pro-poor policy responses: discussion
The International Labour Organization (ILO), the UN agency which promotes
internationally recognised labour rights, defines decent work as including
productive and freely chosen work, adequate labour rights, social protection, and
social dialogue between employers, employees, and the government.58 This
paper has outlined how the pillars of decent work have been eroded in recent
decades and will now explore how we can move from the current situation
towards decent work in the future.
The scale, depth, and human and economic impacts of in-work poverty have
been sidelined from political debate for decades. However, as the UK seeks to
rebuild its economy, creating decent work is not a luxury that cannot be
afforded. The cost of in-work poverty is too high, and the potential gains to
individual and community well-being and the economy are so significant that
ending in-work poverty is not a choice it is an urgent necessity.
Oxfam has identified some possible short-term policy responses in a number of
areas that could help alleviate working poverty in the UK (set out below). We
welcome further debate and discussion around these areas, as well as
consideration of longer-term and more far-reaching strategies to eliminate
working poverty and ensure decent work for all, involving the full range of
stakeholders in this area.

1. Work should pay enough to live on


With almost three-quarters of the working poor in low-paid employment, it
follows that addressing low pay would significantly reduce working poverty.
Oxfam believes that every full-time job should pay enough to live on, and that
those who are only able to work part-time should be supported by adequate
social protection to achieve a reasonable income.

The Living Wage


Definitions of what constitutes enough income to live on vary, but the Living
Wage is a useful guide. The Living Wage is defined as a wage which is sufficient
for every worker in the country to earn enough to provide their family with the
essentials of life.59 The Living Wage currently stands at 8.30 inside London and
7.20 outside the capital considerably higher than the NMW of 6.08,60 and
providing a full-time income of around 15,000 a year in London and 13,000
outside London.
The concept of the Living Wage, as a voluntary policy taken up by employers,
has gained significant support across the UK and has already lifted over 10,000
families out of poverty.61 The Living Wage Foundation62 has illustrated that
employers can be convinced of both the business case and the social justice
merits of significantly increasing the pay of the lowest-paid workers in their
company. Evidence from companies paying the living wage, including KPMG
and Barclays Bank, has shown that it helps reduce staff turnover (at KPMG by 50

24 When Work Wont Pay, Oxfam Discussion Paper, November 2011


per cent) and increases worker productivity, thus reducing costs for the
company.63
It is vital that employers also look beyond their own, directly employed, staff and
consider responsibility for paying a Living Wage lower down the supply chain to
staff contracted out to agencies, as these often offer the bare minimum to their
employees. Those tendering such contracts would do well to consider the
experience of KPMG and Barclays Bank. Oxfam, too, has witnessed businesses
such as Adidas and New Look reap the benefits of lower staff turnover and
higher productivity in their supply chains across the world by increasing
wages.64

Long-term uprating of the National Minimum Wage


A further policy solution to eradicate low pay could be to raise the National
Minimum Wage up to the level of a Living Wage. However, it must be
acknowledged that raising the NMW too swiftly could fuel inflation and affect the
ability of businesses to create jobs for low-skilled workers. While increases in the
NMW have not resulted in significant job losses to date, and there have been no
obvious knock-on effects on the wages of better-paid workers,65 these potential
impacts must be rigorously explored.
Research would need to be undertaken to identify an appropriate rate and time
period over which to increase the NMW, such that it better reflects a Living
Wage. One possibility could be to increase the NMW by at least average earnings
growth, plus 1 per cent, every year, until it reaches the level of the Living Wage.
This could ultimately save the Treasury billions of pounds as workers would
take less through in-work benefits and return more in tax. An interim policy
could be to consider incentives (such as a reduction in corporation tax) for
employers to voluntarily pay a Living Wage.

Restructuring of labour market rewards


While the value of a pay floor cannot be overstated in terms of its impact upon
millions of workers, it remains an intervention that leaves workers (and
employers) at the mercy of government. Other methods of reducing the
prevalence of low pay and incentivising employers to pay workers enough to
live on must also be considered; these should be solutions that enable workers
and businesses to set pay rates themselves.
Current debates on pay ratios within companies the ratio between the highest
and lowest paid present an opportunity. The Hutton Review of Fair Pay in the
Public Sector has recommended the need for top-to-median pay multiples to be
published, and for all employees who have contributed to increased productivity
to share the benefits.66 In the UK, the average top-to-bottom pay ratio of FTSE 100
companies (those which disclosed data) was 262:1; the highest was 656:1.67
Incentivising lower pay multiples through reduced corporation tax could
improve the pay of the working poor, while also having the broader effect of
reducing wage inequality. We should also examine the level of corporate
welfare support that the government gives to businesses in the form of welfare
support to those on low wages. It is also likely that the declining share of value

When Work Wont Pay, Oxfam Discussion Paper, November 2011 25


that goes to the wages of the bottom 10 per cent of earners as compared with
the increasing share going to the top 10 per cent of earners and to capital share
(profits) warrants scrutiny as an area for policy intervention to reduce low
wages over the long term.68
Oxfam believes that employers can also play an important role in the reduction
of working poverty by sharing greater responsibility for the well-being and
security of workers throughout their supply chains; ensuring healthier,
wealthier, and more highly-skilled workers provides customers, suppliers, and
employers for growth.69 Oxfams Business Case for Fighting Poverty suggests that
such an approach can improve workplace relations, helping to attract, motivate,
and retain staff; improve productivity; create market opportunities (as workers
are able to become consumers and can afford goods themselves); and build
companies brand reputations and help gain the trust of consumers.
Ultimately, fostering a stronger culture of shared responsibility to tackle working
poverty is vital to the long-term prosperity and well-being of both workers and
of the economy. Failure to do so would leave the grinding crisis of working
poverty to continue to rise unchecked while achieving decent work in the UK
would boost the economy, improve the health and well-being of individuals,
families, and communities, and reduce the cost of welfare and health services.

2. Provision of adequate social protection


Oxfam believes that social protection should ensure that everyone, no matter
what their employment status, receives enough to live on as part of a universal
social floor, which adapts to fluctuations in work and labour market demands.70
While working should always result in a greater income than not working, this
should not be achieved by putting in poverty people who are not in work. Nor
should social protection be confused with perpetual subsiding of low-paid work.
Indeed, it is likely that social protection that simply compensates for market
failure to pay enough contributes to an unsustainable welfare bill, to the
detriment of those who need greater protection.

Higher earnings disregard


As indicated earlier, current welfare reform proposals are unlikely to make work
pay for some groups, particularly those working less than 16 hours a week and
single parents. One solution advocated by the Centre for Social Justice is a higher
earnings disregard (the amount that someone on benefits can earn before benefits
are withdrawn) and for only 55 per cent of benefits to be withdrawn above the
disregard.71

Gender-sensitive social protection


It is imperative for social protection measures to be gender-sensitive, offering
women an equal opportunity to sustain employment when they have children.
Overcoming the high cost of child care for those on low incomes is central to
eradicating working poverty. Good quality childcare is so valuable that we

26 When Work Wont Pay, Oxfam Discussion Paper, November 2011


believe investment in childcare support represents excellent value for money.
Oxfam welcomes the extension of child care support to those working less than
16 hours, and the UK government's attempts to ensure that most parents will
receive no less childcare support under Universal Credit than they do under Tax
Credits. However, we do remain concerned that the various changes to the
system amount to a significant reduction in support for the poorest families who
currently receive 95.5% of their childcare costs through Housing Benefit. In
future budgets we would like to see further incentives for parents to work with
an increase in the proportion of childcare costs covered, starting with an increase
to 80% as soon as possible.

Sustainable work must be accompanied by a rebuilding of non-


financial assets
The principle of conditionality must be assessed for its effectiveness in reducing
poverty. Forcing people to take jobs that are low-paid and insecure could, at
worst, push them deeper into poverty or consign them to work with few (if any)
opportunities to earn enough to take them over the poverty line; moreover, it will
affect their ability to fulfil caring responsibilities. It is vital that welfare-to-work
policies account for the full circumstances of the individual, and that they place
significant importance upon the value of rebuilding non-financial assets such as
human resources and social capital.72

3. Ensuring adequate labour rights and that labour


rights are effectively enforced
The impact of changes to regulatory policies should be rigorously evidenced. The
governments attitude towards labour rights has often been that they are a
burden on business. But evidence for the proposition that labour market
regulation has a negative impact on economic performance is mixed, at best.73
Higher levels of labour market flexibility have not hindered economic recovery
in countries such as Germany, while some have found flexibility in the UK to be
positively associated with unemployment.74 Similarly, the UKs high level of
labour market flexibility has not resulted in a rapid return to growth, or
increased job creation as expected. As the Chartered Institute of Personnel and
Development (CIPD) has recently noted, the case for wholesale employment
deregulation is thus far from being a no-brainer.75 For example, rather than
viewing regulation as a burden, 79 per cent of licensed gangmasters are in favour
of licensing by the Gangmasters Licensing Authority because it has created a
level playing field between employment agencies; it has also reduced the burden
on supermarkets to check that their suppliers are adhering to labour regulations.
It is clear that the highly flexible labour contracts common in a deregulated
labour market can contribute to working poverty and create barriers to
progression. It is therefore important to ensure that workers have adequate
labour rights and that employers are appropriately regulated so as to protect
workers.

When Work Wont Pay, Oxfam Discussion Paper, November 2011 27


Reduce precarious employment contracts
The introduction of the EU Agency Workers Directive in October 2011, which
gives temporary workers many of the rights afforded to permanent staff after 12
weeks of employment, is a huge boost to the protection afforded to workers.
However, its implementation should be carefully monitored to ensure that
obligations are not avoided by unscrupulous employers. It should also be noted
that half of all temporary employees are employed for less than 12 weeks and
will therefore not experience any improvements.76
The extent to which the growth of flexible and very part-time contracts has
impacted upon the poorest and prevents their progression is not always clear.
While flexibility and the ease of hiring and firing may encourage the creation
of jobs by reducing the risk to employers, at the bottom end of the labour market
such contracts have fuelled a low-pay/no-pay cycle (churn) and associated
instability; this in turn is detrimental to building confidence in taking up work.
Furthermore, a highly flexible labour market arguably could prevent progress on
the governments policy objective of returning the long-term unemployed to
sustained employment (under the Work Programme). It is likely that those at
greatest risk of being fired will be those entering the labour market following
long-term unemployment, as employers do not routinely take on the challenge of
developing those with fewer skills and experience. This must, of course, be
carefully balanced against making employment protection so strong that it
becomes a disincentive to employers creating decent jobs for those returning to
the labour market.
Nonetheless, in the long term, the creation of a single Employment Status that
affords workers (including temporary workers) the same employment rights as
employees could reduce the creation of insecure, atypical employment and
significantly encourage greater responsibility by employers for workers
development.

Right to request flexible working


For many single parents, who must fit paid work around child-care
responsibilities, the right to request flexible working (on their terms, rather than
those of the employer) is crucial. At the moment, the government has proposed
that this right should be extended to all those classed as employees under the
Employment Status Regime.77 Flexible working has seen widespread support
from key industry voices such as the CBI and the John Lewis Partnership as a
means of increasing engagement, productivity, and worker retention.78 Denying
workers the right to request flexible working prevents those who are at greater
risk of working poverty from being able to fit work flexibly around their other
commitments. The gains to both employers and employees to be made from the
extension of this right to workers, and the impact upon working poverty rates,
must be examined as the government takes forward its policies on flexible
working.

28 When Work Wont Pay, Oxfam Discussion Paper, November 2011


Employment Tribunals
The proposed fee of 200 to deter frivolous cases being taken to Employment
Tribunals and up to 1,000 before a case is heard is likely to discourage the
most vulnerable from making claims against exploitative employers. Crucially, in
the absence of an enforcement body with the appropriate authority, Employment
Tribunals constitute the only way of claiming for unpaid holiday pay79 the
number one violation reported.80 A possible solution could be to exempt low-
paid workers, often the most vulnerable, from the proposed fees, in order to
ensure that unscrupulous employers do not take advantage of their situation.

Protection from unfair dismissal


Increasing the qualification period for unfair dismissal to two years will increase
insecurity for those in low-paid jobs. The impact of this proposal upon all
workers must be rigorously considered. Thus far, little empirical evidence has
been put forward to justify increasing the qualification period. Instead, evidence
from the OECD has shown that less job protection simply makes employment
rates less stable over the economic cycle, with little impact upon the structural
rates of employment or unemployment.81 As the CIPD has noted, raising the
qualification period yielded no discernible benefit in the 1980s and is
detrimental to fostering a culture of genuine engagement and trust between
employers and their staff, and potentially harmful to the long-term performance
of the UK economy.82
It is vital that changes to labour rights are based upon rigorous evidence of their
impacts on the poorest workers, but also that they assess whether such changes
will improve the economy or simply lead to increasingly unstable employment.

Effective labour rights enforcement


While the majority of businesses abide by the law and respect labour rights
standards, people in poverty are particularly at risk of having their rights
violated because employers know they are less likely (or able) to complain
which of course can in turn become a cause of their poverty.
At the moment, some sectors of the economy (agriculture, forestry, and fisheries
for example under the jurisdiction of the Gangmasters Licensing Authority) are
better regulated than others, such as hospitality, where agency workers have
their labour rights protected by the Employment Agency Standards Inspectorate.
The GLA has considerably raised compliance with labour standards in the
sectors of the economy that it regulates, and has been recognised by academics83
and government84 as an example of effective, non-burdensome employment
rights enforcement.
The creation of a single labour rights inspectorate (to replace the five agencies
currently tasked with enforcement) would be the most effective way to ensure
appropriate regulation across all industries. Such a public body would
proactively act upon intelligence about exploitation and rights violations (rather
than wait for workers to report abuse, as the GLA does at the moment), and
would have the power to undertake cases on behalf of employees. Clearly such a
system would only be effective if it were adequately resourced, with sufficient

When Work Wont Pay, Oxfam Discussion Paper, November 2011 29


inspectors to ensure that all complaints (including anonymous ones) were
investigated promptly, and that routine inspections were sufficiently frequent to
significantly increase the likelihood that non-compliance would be picked up. It
would also be important to ensure that the expertise of bodies such as the HSE,
built up over many years, was not lost: by, for example, maintaining specialist
inspectors with a focus on particular industries or areas of employment law.
In the current economic climate, the risk of employers breaching the law to avoid
giving workers better terms and conditions is high and the need for effective
enforcement is greater. On this basis, an effective interim policy to achieving a
single labour rights inspectorate could be to apply the practices of the GLA to
other sectors of the economy. In this way, sectors such as construction, social
care, and hospitality, in which the risks of exploitation and working poverty are
high, and in which agency labour is prevalent, would see a significant
improvement in labour rights standards.

4. Ensure adequate progression reducing the gap


between good jobs and bad jobs
Oxfam believes that all work should be decent work, which pays people enough
to live a dignified and secure life. In the long term this suggests that some
restructuring of the economy, and of the jobs market, will be necessary, to create
more of the middle-tier jobs the economy currently lacks, and to ensure that
jobs at the bottom of the jobs market are not actually bad jobs but are
themselves decent jobs and are valued and rewarded appropriately.
While working towards that ambition, it is appropriate to emphasise progression
for those at the bottom of the jobs market, ensuring that they are enabled to
develop skills and take up training, and are supported to look for better work.
Increasing the skill levels of those at the bottom will ensure that the workers
and the jobs themselves become more productive, and that workers are able to
take advantage of whatever advancement is possible within their sector (moving,
for instance, from an entry-level to a more senior care worker role), even if in the
long term we need to challenge how the current hourglass structure of the
labour market operates.

Work-based training
In a best case scenario, training and progression to better-quality work will occur
in the workplace, particularly as this involves less risk for the poorest workers.85
Though there has been consistent investment by businesses in training,86 this is
likely to be by larger firms. Small and medium enterprises (SMEs) are the least
likely to be able to afford investment in staff, and addressing the difficulties faced
by SMEs is crucial to eradicating working poverty. The axing of Train to Gain, an
initiative to deliver employer-led vocational training on the job, removes an
important tool for businesses to support work-based approaches to progression.
Alternative schemes to support businesses that would otherwise struggle to
provide training should be prioritised.

30 When Work Wont Pay, Oxfam Discussion Paper, November 2011


Training outside the workplace
In the absence of work-based opportunities, development opportunities such as
the Lifelong Learning Account will be vital in improving the skills of the most
vulnerable and providing choice over training options. However, those in
working poverty, who are often already time-poor,87 will struggle to take up
training opportunities. Research should be undertaken to explore the impact of
granting the right to request time to train which is currently available only to
employees (not workers) of companies with more than 250 employees to
everyone, irrespective of the size of their company or their employment status. It
would be vital to ensure that extension of the right to request time to train
coincides with incentives for SMEs to provide in-house training opportunities for
low-paid workers as an alternative to taking time off. Such an approach would
ensure that gains in productivity would benefit both the employer and the
employee.

Support in seeking employment


Finding work is often difficult for those in working poverty. Support must be
provided to reduce the risk undertaken in moving from a low-paid job to a
better-quality and better-paid job.88 This will involve helping workers to develop
connections and networks with others, and greater use of labour market
intermediaries that help people find work. NGOs and unions, especially Union
Learning Representatives, are particularly well placed to help people gain better
employment, as well as matching local business needs with appropriate skills
training. Crucially, for low-paid, temporary agency workers there are often few
(if any) intra-workplace career ladders available. Thus, in addition to supporting
the working poor to find opportunities, businesses should be encouraged to
create partnerships with agencies that create progression routes for low-paid
workers and (in some cases) facilitate climbing the supply chain.

5. Greater social dialogue is vital for businesses and


workers
Evidence shows that in countries such as Denmark, where there are high levels of
union membership, there are low levels of in-work poverty,89 and a higher level
of wage bargaining coverage is associated with a reduction of in-work poverty.90
In the UK, however, the erosion of union powers and the decline in union
membership and recognition by employers have led to a weakened social
dialogue between workers and business. It is important that workers have a
stronger voice in the workplace, and that unions are seen as protecting and
developing workers as part of a successful enterprise, rather than as a negative
influence within companies. Unions can help to ensure that workers rights are
upheld without resort to tribunals, broker training and development
opportunities, and support wage-setting for example, through mandatory
representation on wage-setting boards.
There are also now new opportunities to secure greater leverage for workers at
any point within a supply chain, irrespective of location or nationality, by
building new alliances: for example with consumers who want to buy clean

When Work Wont Pay, Oxfam Discussion Paper, November 2011 31


clothes (clothes produced without exploitation) or those supporting calls for a
Living Wage. Faith groups and community organisations joined the London
Citizens campaign for a Living Wage for cleaners in East London; consumers
could seek to guarantee that their shoes are not stitched by children or their
crackers made by homeworkers who are denied the Minimum Wage.

Corporate social responsibility (CSR) can be another dimension of this process, as


companies (particularly those with high-profile brands to protect) are
increasingly recognising that they are corporate citizens and, as such, have
responsibilities not only to their shareholders but also to wider society. Thus, for
example, the Ethical Trading Initiative one of the few CSR initiatives based
within the UK produces a base code of minimum labour standards, which its
corporate members agree to work actively towards implementing within their
supply chains. Although such developments are often criticised as little more
than a public relations exercise or, even more concerning, an ethical smokescreen
behind which exploitative companies can hide, the existence of an agreed set of
minimum standards does at least provide labour rights campaigners and trade
unionists with another tool to help gain greater leverage and attention in seeking
justice for workers.

32 When Work Wont Pay, Oxfam Discussion Paper, November 2011


Notes
1
International Monetary Fund, World Economic Outlook Database, September 2011 (accessed 17
October 2011).
2
Warburton Brown, Exploring BME Maternal Poverty: The financial lives of ethnic minority mothers
in Tyne and Wear, Oxfam (2011), p.42
3
Oxfam works with the Single Parent Action Network (SPAN) to make single parents on
Jobseekers Allowance (JSA) more aware of their employment rights, so that they do not accept
jobs with poor employment conditions that place them deeper in poverty. SPAN is also working with
single parents to make them more aware of the flexibilities they are entitled to within the welfare
system, and is working with Jobcentre Plus and the governments Work Programme to ensure that
staff in Bristol are more aware of the risks of vulnerable employment and do not pressure women
into taking agency work that puts their families at risk.
4
Athwal, Brill, Chesters and Quiggin, Recession, poverty and sustainable livelihoods in Bradford,
Joseph Rowntree Foundation (JRF) (2011), p.10.
5
Oxfam has run projects with migrant workers in Manchester funded by the Big Lottery, and has
worked with employers and migrant workers in the social care sector in Liverpool. It has also
undertaken research into employment conditions in the hospitality, social care, agriculture,
construction, and other industries.
6
Cooke and Lawton, Working Out of Poverty: A study of the low-paid and the working poor, IPPR
(2008), p.9.
7
A New Approach to Child Poverty, HM Government (2011), p.3.
8
Parekh, McInnes, and Kenway, Monitoring Poverty and Social Exclusion 2010, JRF (2010), p.14.
9
See Frank Field, The Foundation Years: Preventing Poor Children from Becoming Poor Adults,
HM Government (2010).
10
Fair Society, Healthy Lives: Strategic Review of Health Inequalities in England post-2010, The
Marmot Review (2010).
11
See Church Action on Poverty, IPPR North, Oxfam, and Urban Forum, Community Assets First:
The Implications of the Sustainable Livelihoods Approach for the Coalition Agenda, IPPR North
(2011); May, Brown, Cooper, and Brill, The Sustainable Livelihoods Handbook: An Asset Based
Approach, Oxfam and Church Action on Poverty (2009); Orr, Brown, Smith, May, and Waters,
When Ends Dont Meet: An Analysis of Households in Thornaby-on-Tees, Oxfam, Thrive, and
Church Action on Poverty (2006).
12
Brewer and Phillips, IFS Analysis on the Living Wage, IFS (2010).
13
Stallard, The Business Case Behind Fair Pay in Not Just For The Good Times: The New
Imperative for Fair Pay, Fair Pay Network (2009), p.14.
14
Athwal, Brill, Chesters and Quiggin, Recession, poverty and sustainable livelihoods in Bradford,
Joseph Rowntree Foundation (JRF) (2011), p.27.
15
Commission to the European Parliament, Towards Common Principles of Flexicurity: More and
better jobs through flexibility and security, COM (2007) p.359.
16
Department for Business, Enterprise and Regulatory Reform (BERR), Globalisation and the
Changing UK Economy (2008), p.45.
17
Rogers, Recession, Vulnerable Workers and Immigration, COMPAS (2009), p.33.
18
Gallagher and OLeary, Recruitment 2020: How recruitment is changing and why it matters,
Demos (2007), pp.26-27.
19
UNISON, The Hidden Workforce (2010), p.1.
20
DeAnne Julius, Understanding the Public Services Industry: How big, how good, where next?,
BERR (2008).
21
Sissons, The Hourglass and the Escalator: Labour Market Change and Mobility, The Work
Foundation (2011), p.9.
22
Department for Work and Pensions, Households Below Average Income: An analysis of the
income distribution 1994/952009/10 (2011), p.158.

When Work Wont Pay, Oxfam Discussion Paper, November 2011 33


23
Hossain, Byrne, Campbell, Harrison, McKinley, and Shah, The Impact of the Global Economic
Downturn on communities and poverty in the UK, JRF (2011), p.34.
24
Philpott, The 2010 Jobs Recovery, CIPD (2010), p.2.
25
Ibid.
26
Office for National Statistics, Labour market statistical bulletin: August 2011 (2011), p.2.
27
Athwal, Brill, Chesters, and Quiggin, Recession, poverty and sustainable livelihoods in Bradford,
JRF (2011) p.25.
28
The Poverty Site, Numbers in Low Pay, (accessed 19 October 2011).
29
Carers UK, Real Change, Not Short Change (2007), p.13.
30
Department for Work and Pensions, Households Below Average Income: An analysis of the
income distribution 1994/952009/10 (2011).
31
Poinasamy and Bance, Turning the Tide, Oxfam (2009); Poinasamy and Fooks, Who Cares?,
Oxfam (2009).
32
The Poverty Site, Low Pay by Ethnicity, (accessed 17 October 2011).
33
The Poverty Site, Numbers in Low Pay, (accessed 16 November 2011).
34
Clayton and Brinkley, Welfare to What?, Work Foundation (2011), p.15.
35
Lawton, Nice Work If You Can Get It: Achieving a sustainable solution to low pay and in-work
poverty, IPPR (2009), p.17.
36
Sissons, The Hourglass and the Escalator: Labour Market Change and Mobility, The Work
Foundation (2011), p.31.
37
Sissons, The Hourglass and the Escalator: Labour Market Change and Mobility, The Work
Foundation (2011), p.31.
38
Metcalf, Why Has the British National Minimum Wage Had Little or No Impact on Employment?,
Centre for Economic Performance, LSE (2007), p.2.
39
See Levell and Oldfield, The spending patterns and inflation experience of low income
households over the past decade, Institute of Fiscal Studies (2011).
40
Ibid.
41
An Anatomy of Economic Inequality in the UK: Report of the National Equality Panel,
Government Equalities Office (2010), p.39.
42
Hirsch, A Minimum Income Standard for the UK, JRF (2011), p.1.
43
Hirsch and Moore, The Living Wage in the United Kingdom: Building on Success, Living Wage
Foundation (2011), p.9.
44
Commission to the European Parliament, Towards Common Principles of Flexicurity: More and
better jobs through flexibility and security, COM (2007) p.359.
45
Ibid. p.5.
46
The Consumer Price Index is an inflation rate based on the Harmonised Index of Consumer
Prices and measures inflation on internationally agreed standards throughout Europe. The Retail
Price Index includes mortgage interest payments and has been, on average, 0.7 percentage points
higher than the CPI over the past decade.
47
Haddad and Longworth, Struggling With The System, Oxfam (2010), p.11.
48
The child poverty rate is 18.9 per cent in couples with single full-time earner but less than 5 per
cent among those with two earners, and 2.1 per cent with two full-time earners. S Himmelweit,
Womens Budget Group briefing on issues concerning second earners (October 2011).
49
Reed, Flexible with the Truth? Exploring the Relationship between Labour Market Flexibility and
Labour Market Performance, Landman Economics (2010), p.66.
50
European Foundation for the Improvement of Living and Working Conditions, Flexible forms of
work: very atypical contractual arrangements, (2010), p.10.
51
Ibid., p.11.
52
Office for National Statistics, Labour market statistical bulletin: August 2011 (2011), p.2.

34 When Work Wont Pay, Oxfam Discussion Paper, November 2011


53
Unpublished research by Oxfam, Community Links, and Salford Council into the informal
economy in Salford, 2010 (available on request).
54
Citizens Advice, Give Us A Break! (2011), p.6.
55
TUC Commission on Vulnerable Employment, Hard Work, Hidden Lives: Short Report (2008),
p.37.
56
See Ray, Hoggart, Vegeris, and Taylor, Better off working? Work, poverty and benefit cycling,
JRF (2010), p.40; London Development Agency, Valuing family, valuing work: British Muslim
women and the labour market (2008), p.45.
57
Clayton and Brinkley, Welfare to What?, Work Foundation (2011), p.12.
58
European Foundation for the Improvement of Living and Working Conditions, Decent Work
(2007) (accessed 19 October 2011).
59
Living Wage Foundation, http://www.livingwage.org.uk/
60
The National Minimum Wage Rates, as of October 2011.
61
Living Wage Foundation, http://www.livingwage.org.uk/
62
Ibid.
63
KPMG, London Mayor and KPMG Launch Living Wage Campaign (accessed 17 October 2011).
64
Oxfam, Briefings for Business No.5: Better Jobs in Better Supply Chains (2010), p.8.
65
LSE, Centre for Economic Performance, The National Minimum Wage: The Evidence of its
Impact on Jobs and Inequality, LSE (2008) (CEPPA006), p.1.
66
HM Treasury, Hutton Review of Fair Pay in the Public Sector (2011), p.59.
67
One Society, A Third Of A Percent (2011), p.7.
68
Whittaker and Savage, Missing Out: Why Ordinary Workers are experiencing growth without
gain, Resolution Foundation (2011), p.8.
69
Oxfam, Briefings for Business No. 2: A Business Case for Fighting Poverty (2009), p.3.
70
King and Sweetman, Gender Perspectives on the Global Economic Crisis, Oxfam (2010), p.12.
71
Centre for Social Justice, Dynamic Benefits: Towards Welfare That Works (2009), p.26.
72
See Church Action on Poverty, IPPR North, Oxfam, and Urban Forum, Community Assets First:
The Implications of the Sustainable Livelihoods Approach for the Coalition Agenda, IPPR North
(2011), p.21.
73
Reed, Flexible with the Truth? Exploring the Relationship between Labour Market Flexibility and
Labour Market Performance, Landman Economics (2010), p.8.
74
Monastiriotis, Employment Flexibility and UK Regional Unemployment: Persistence and
Macroeconomic Shocks, DTI (2006), as cited in Reed (2010), p.8.
75
CIPD, The Economic Rights and Wrongs of Employment Regulation (2011), p.2.
76
BERR, Implementation of the agency workers directive: a consultation paper (2009), p.90.
77
BIS, Consultation on Modern Workplaces, HM Government (2011), p.36.
78
Leighton and Gregory, Reinventing the Workplace, Demos (2011); CBI, Thinking Positive: the
st
21 Century Employment Relationship (2011).
79
Citizens Advice, Evidence Winter 2010 (2010) p.10.
80
Citizens Advice, Give Us A Break! (2011), p.6.
81
CIPD, The Economic Rights and Wrongs of Employment Regulation (2011), p.11.
82
Ibid.
83
See Wilkinson with Craig and Gaus, An Evaluation of the Gangmasters Licensing Authority, The
Wilberforce Institute, Hull University for Oxfam (2009); Boleat, An Agenda for Better Regulation,
Policy Exchange (2009).
84
See Gangmasters Licensing Authority: A Hampton Implementation Review Report, BIS, BRE,
NAO (2009).

When Work Wont Pay, Oxfam Discussion Paper, November 2011 35


85
Ray, Hoggart, Vegeris, and Taylor, Better off working? Work, poverty and benefit cycling, JRF
(2010), p.40; Crisp, Batty, Cole, and Robinson, Work and worklessness in deprived
neighbourhoods (2009), p.36.
86
BIS, Skills for Sustainable Growth (2010), p.11.
87
Hossain, Byrne, Campbell, Harrison, McKinley, and Shah, The Impact of the Global Economic
Downturn on communities and poverty in the UK, JRF (2011), p.37.
88
Ray, Hoggart, Vegeris, and Taylor, Better off working? Work, poverty and benefit cycling, JRF
(2010), p.35, p.40.
89
Commission of the European Communities, Industrial Relations in Europe 2008 (2009), p.122.
90
Palacios, Rodriguez, Pena-Casas, Earnings inequality and in-work poverty, Reconciling Work
and Welfare in Europe (2009), p.24.

36 When Work Wont Pay, Oxfam Discussion Paper, November 2011


Oxfam GB November 2011
This paper was written by Krisnah Poinasamy, and edited by Louie Fooks. Oxfam is grateful for the assistance
of Ben Morgan, Moussa Haddad, Helen Longworth, Lucy Brill, Katherine Trebeck, Kate Wareing, Chris
Johnes, Joana Martinho and many other colleagues in the development of this paper.
Oxfam would like to thank the many individuals who have shared their experiences of working poverty with us.
Some names have been changed. Some quotes and case studies have previously been published in other
Oxfam papers. All quotes and case studies relate to experiences reported in the past two years.
This publication is copyright but the text may be used free of charge for the purposes of advocacy,
campaigning, education, and research, provided that the source is acknowledged in full. The copyright holder
requests that all such use be registered with them for impact assessment purposes. For copying in any other
circumstances, or for re-use in other publications, or for translation or adaptation, permission must be secured
For further information on the issues raised in this paper please e-mail ukpoverty@oxfam.org.uk and a fee
may be charged.
This paper is available at www.oxfam.org.uk/policyandpractice.
The information in this publication is correct at the time of going to press.
Oxfams work in the UK: Oxfam works to overcome poverty in the UK in three ways. We develop projects
with people living in poverty to improve their lives and show how things can change; we raise public
awareness of poverty to create pressure for change; and we work with policy makers to tackle the causes of
poverty.
www.oxfam.org.uk
Oxfam is a registered charity in England and Wales (no 202918) and Scotland (SC039042). Oxfam GB is a
member of Oxfam International.
Published by Oxfam GB in November 2011 by Oxfam GB, Oxfam House, John Smith Drive, Cowley, Oxford,
OX4 2JY, UK.

When Work Wont Pay, Oxfam Discussion Paper, November 2011 37

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